The four federal banking agencies--the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision--today published an interagency advance notice of proposed rulemaking (ANPR) regarding potential revisions to the existing risk-based capital framework. These changes would apply to banks, bank holding companies, and savings associations.

The ANPR document discusses various modifications to the U.S. risk-based capital standards including:

Increasing the number of risk weight categories to which credit exposures may be assigned;

Expanding the use of external credit ratings as an indicator of credit risk for externally-rated exposures;

Expanding the range of collateral and guarantors that may qualify an exposure for lower risk weights;

Using loan-to-value ratios, credit assessments, and other broad measures of credit risk for assigning risk-weights to residential mortgages;

Modifying the credit conversion factor for various commitments, including those with an original maturity of under one year;

Requiring that certain loans 90 days or more past due or in a non-accrual status be assigned to a higher risk weight category;